By Carolyn Cohn

Six asset managers including M&G and Legal & General said they were keeping property funds totalling more than $7.5 billion in assets frozen as valuers continue to struggle to assess real estate due to the coronavirus crisis.

M&G froze its $3.2 billion UK Property Portfolio in December, as uncertainty over Brexit and weakness in Britain's retail commercial property sector prompted redemption requests.

Most other UK property funds also halted redemptions in March, as valuers said there was "material uncertainty" about property values at the end of the first quarter due to the coronavirus pandemic.

As the second quarter draws to a close, M&G said its valuers were still applying a material uncertainty clause due to the lack of property deals. However, it said its clause did not apply to the industrial and logistics property sectors where there had been transactions.

Legal & General said there was no change to the lock-up of its 2.9 billion pound ($3.7 billion) fund.

Standard Life said two funds totalling about 500 million pounds remained frozen due to valuation difficulties, while Aviva, Columbia Threadneedle and Janus Henderson said the material uncertainty clause still applied to their 120 million, one billion and 500 million pound funds respectively.

The funds are expected to remain frozen till at least September due to the valuation challenges, and some of those which usually offer daily redemptions may need to change structure to survive, industry sources say.

The M&G fund has 181 million pounds in real estate assets under offer or for sale and the sale of all of the asset would bring cash levels up to 16.1%, M&G said in a statement.

"Reopening the fund for dealing will depend on cash levels but will also be contingent on the material uncertainty clause being lifted," it said.

Other frozen property funds include those managed by Kames and Royal London. They did not immediately respond to a request for comment.

($1 = 0.7952 pounds)

(Additional reporting by Sinead Cruise; Editing by Edmund Blair and Emelia Sithole-Matarise)